Aug. 4 (Bloomberg) -- The threat of $500 billion in future
defense cuts codified in the new deficit-reduction law could
sharpen a dispute between Republicans and Democrats over
national security as the 2012 campaign intensifies.

President Barack Obama and congressional Republican leaders
designed the defense cuts -- as well as reductions in all other
areas of government, including Medicare -- as a doomsday
incentive to force Congress to enact a more targeted spending-cut package by year’s end.

For the Defense Department, cuts ranging from substantial
reductions in the military’s 1.43 million-strong force to
eliminating subsidies for the Pentagon’s chain of subsidized
grocery stores would likely be on the table under the worst-case
scenario. Regardless of whether they materialize, the potential
cuts to the military have become a political weapon for both
sides.

Republicans are painting Obama and Democrats as
irresponsible and weak on defense for insisting they be included
in the so-called “trigger” to compel enactment of a $1.5
trillion deficit-slashing measure.

“Can you imagine anything more irresponsible, for the
commander in chief of the military to promote -- not just
promote but insist -- on the knowing destruction of the U.S.
military as a means to threaten Congress?” Senator Jon Kyl of
Arizona, the second-ranking Republican, said yesterday before
passage of the debt-reduction measure, which he supported.

Democratic Message

Democrats say they will use the threat of automatic defense
cuts to prod Republicans to accept tax increases as part of the
$1.5 trillion debt-reduction deal -- or charge they would rather
protect the rich than the military.

“In the coming months, our Republican colleagues will be
given the following test: Will they choose to protect special-interest tax breaks over investments necessary to keep our
nation strong and secure?,” said Representative Chris Van
Hollen of Maryland, the top Democrat on the Budget Committee and
former head of the party’s House campaign arm. “Let’s get on
with that big national debate.”

The debate would intensify next year -- just as the 2012
campaign is heating up -- should Congress fail to enact a
deficit-cutting measure by Christmas. Under the law, the
automatic cuts would kick in beginning in 2013 should Congress
fail to produce such a package that a special committee is
supposed to recommend.

Panetta Warning

In a message to defense personnel yesterday, Defense
Secretary Leon Panetta said the $500 billion in threatened
automatic cuts over a decade starting in 2013 “would be
completely unacceptable” and may do “real damage.” The
reduction is meant to be “unpalatable to spur responsible,
balanced deficit reduction,” he said.

Reducing troop strength would offer the biggest cost
savings, yielding about $1 billion annually for every 10,000 in
military personnel cut, said Gordon Adams, a professor at
American University in Washington and a former budget official
in President Bill Clinton’s administration.

Several panels and commissions that have examined ways to
reduce U.S. deficits have proposed a menu of new weapons that
could be eliminated. As the largest of the Pentagon’s weapons
programs with an estimated cost of $382 billion, Lockheed Martin
Corp.’s F-35 Joint Strike Fighter has been in the crosshairs of
several such studies.

Simpson-Bowles Suggestions

Former Senator Alan Simpson, a Wyoming Republican, and
former Clinton administration White House Chief of Staff Erskine
Bowles, co-chairmen of a deficit-reduction commission that Obama
created last year, proposed eliminating the Marine Corps version
of the F-35 jet to save as much as $27.1 billion.

They also suggested the Army forgo a new fleet of trucks
and stop buying digital radios to save $2.3 billion.

General James Cartwright, the vice chairman of the Joint
Chiefs of Staff, has said the Pentagon is reviewing its need for
11 aircraft carriers.

The hunt for cuts may reach beyond troops and weapons to
some of the perks military families enjoy.

Senator Tom Coburn, an Oklahoma Republican, in his July
report “Back in Black” highlighted an earlier assessment by
the nonpartisan Congressional Budget Office that eliminating
U.S. subsidies for the Defense Commissary Agency, which operates
252 grocery stores around the world, could save about $9.1
billion.

Compromise Motivation

The prospect of such cuts and the outcry they would spark
could be a strong motivator for compromise, say strategists in
both parties.

“It’s smart because it pushes the sides together; that’s
what its designed to do,” said Republican strategist John
Ullyot, a former spokesman for the Senate Armed Services
Committee. “That’s really going to make at least the
Republicans” on the special committee “come to the middle as
much as they can.”

Still, should stalemate prevail and the cuts go forward as
threatened, Republicans would have a potent political argument
to use against Obama and Democrats, Ullyot said.

“Obama has full ownership of this in the presidential
race, and there’s going to be some unpopular cuts,” Ullyot
said. “It will be much easier for the Republican candidates to
be on the outside throwing rocks inward, as opposed to having to
defend these harmful cuts. It will become a big campaign
issue.”

Republican Candidates

Republican presidential candidates already have begun
hitting Obama on the issue. Former Massachusetts Governor Mitt
Romney said as president he would never have agreed to a measure
that “opens the door to higher taxes and puts defense cuts on
the table.”

Representative Michele Bachmann of Minnesota said even
worse than what she views as paltry spending cuts in the debt
measure was “that this deal puts our national security at risk
because of the severe cuts to defense that kick in should the
president not do his job in the next few months.” She was one
of 66 House Republicans who voted against the accord on Aug. 1.

In a statement, she said it was difficult for Obama “to
understand the importance of national security.”

Still, Democrats argue that Republicans also face political
risks over the threatened defense cuts. Centrist Democrats --
those who are fiscally conservative and favor a strong national
defense -- joined Republicans to push the debt measure through
Congress, and they will challenge Republicans to help produce a
deficit-reduction package both parties can accept, said Jim
Arkedis of the Progressive Policy Institute’s Progressive
Security Project.

Trade-Off

“The extent to which Republicans are willing to sacrifice
revenue increases specifically as a trade-off for defense cuts -
- that’s going to be where the rubber meets the road,” Arkedis
said.

Democrats have to push back against the notion that they
are weak on security, which can be politically damaging, and
argue instead that both reasonable defense cuts and revenue has
to be part of a balanced deficit-reduction package, along with
domestic spending reductions, he said.

“It would really behoove Democrats to get out front and
win the message war on this because that’s typically where
Democrats get left behind on defense,” Arkedis said.

Senator Charles Schumer, a New York Democrat who plays a
major role in shaping the party’s message, said the prospect of
“very, very, very deep” defense cuts should give Republicans a
powerful incentive to compromise on deficit reduction.

“It holds sharp swords over the heads of both parties,”
he said.

Kyl, a contender for appointment to the special committee,
said he would “disregard” the threatened reductions while
prodding his party to make them a campaign issue should
Democrats try to force Republicans into accepting tax increases
to stave them off.

“If anyone says to me, ‘Remember, the trigger is
Armageddon for the U.S. military,’ my response will be, ‘Let’s
take that debate to the American people and let them decide.’ ”